Let’s be upfront: If your startup doesn’t have a tight handle on its financials, your chances of securing (much less retaining) venture capital will be slim.
Take it from Zak Kukoff, formerly an Investor at General Catalyst — a global investment and transformation company with a portfolio that includes Airbnb, Anduril, Anthropic, Canva, HubSpot, Ramp, and Stripe — and now Chair of the Tech and Venture Practice at Lewis-Burke Associates.
For our expert funding series, the Puzzle team sat down with Zak to unpack topics including:
Let’s dive in.
“In the boom period of 2021, maybe you could’ve gotten away with some financial irresponsibility. But being fiscally responsible today is one of the best things you can do to give your startup a chance at surviving and ultimately winning.”
If you're reading this in late 2026, the stakes around financial discipline are higher than they've been since the 2008 downturn — and the data backs that up.
The numbers tell a stark story. Multiple sources tracking Series A expectations put the burn multiple bar at below 1.5x before top-tier VCs will seriously consider funding a startup. The seed-to-Series A conversion rate has fallen off a cliff: Carta's graduation-rate data puts the 24-month conversion rate at roughly 15–20% today, down from about 25–30% for cohorts through 2019 — a collapse, not a dip. Runway expectations have settled at 18–24 months as a minimum. The tolerance for financial looseness has tightened considerably.
Capital is still flowing — Crunchbase tracked $300B in VC funding across 6,000 startups in Q1 2026 alone — but it's concentrating fast. Mega-rounds are going to a narrow slice of startups with proven traction, while early-stage founders who can't demonstrate clean unit economics are getting passed over. The era of growth-at-any-cost is over. What VCs are buying in 2026 is discipline. The Series A readiness pack covers exactly what that bar looks like in practice.
With that backdrop, here's what Zak says founders need to know.
The numbers coming out of Q3 2026 sharpen this picture further. That same Q1 funding total masks a barbell distribution: mega-rounds are concentrating at the top, with later-stage deals capturing a growing share of all capital raised, while seed and Series A deal counts have only partially recovered from the 2022–2024 downturn. The seed-to-Series A conversion rate now sits around 38%, down from roughly 50% in 2021.
What this means in practice: capital is available, but it is going to the founders who can demonstrate clean unit economics, a firm handle on burn, and a credible runway story. The "we'll figure out the finances later" approach that worked in 2021 is no longer viable. VCs in 2026 are running tighter due diligence on financial health from the very first meeting — burn multiple, runway, and monthly cash position are table-stakes questions before any term sheet conversation begins.
That's the environment in which Zak's advice lands today. It was true in 2021; it's non-negotiable in late 2026.
In Zak’s words, pitching to investors is trying to sell a dream.
To raise money from a firm, that VC must believe your startup can become a $10-billion company — something few businesses will ever accomplish.
And, in the end, it comes down to how well you know your numbers. That VC needs to believe:
Not knowing your numbers will leave you vulnerable
Conversely, if you don’t watch your numbers, you may end up with your back against the wall.
At the pre-seed and seed stages, the most important question you can ask is — and any guide to burn rate and runway will tell you the same:
“When will my company run out of money?”
If you fail to check in consistently, you may look up one day and suddenly find you have 4–5 months of runway left — and scramble to raise cash.
Trying to raise from VCs who know you have minimal runway will then expose you to bad actors in the ecosystem: investors who’ll string you along until you have almost nothing in the bank and then force your hand to accept horrific terms.
Those are the potential consequences of overlooking your financials. And that’s why you must know your burn at all times, especially in current market conditions.
Zak expects every founder he supports to know how much money is in the bank every day — including how to calculate burn rate at any given moment.
“The companies that didn’t survive 2008 were those that didn’t understand why they were burning so many dollars or how to get back to reasonable, responsible burn to right the ship.”
Cash is only one perk that startups gain from their investors. Zak prioritizes instilling hard-earned wisdom about financial hygiene in his investments — the kind of essential lessons for startup founders that rarely make it into pitch decks.
This advice tends to be candid or, as he admits, the kind of lessons industry folks might shy away from giving out loud. Below, he outlines three of these.
If a founder continually avoids bookkeeping and accounting, there’s a strong chance they assume they’ll always be able to raise more money.
So, the first major piece of advice Zak provides behind closed doors is:
Wake up and get with the new reality of today’s market conditions. I believe Investors are more conservative than ever (and for good reason). If you do not prioritize diligent tracking of runway, burn, etc., you give VCs even less motivation to fund you.
At least once a month, sit down to ensure you know what processes, tools, and other dependencies you dedicate runway to. (One of those will undoubtedly be human capital, which is the largest driver of burn for most early-stage teams.) Running a founder burn rate audit each month is one of the most direct ways to stay ahead of this.
From there, use tools like Puzzle to understand how your spending compares to benchmarks set by other startups in similar industries, stages, and so on — a core part of startup financial management.
Since the largest portion of your burn will likely be people, you must make sure every salary you pay is worth the while. The classic advice to founders is: Hire slow, fire fast.
Some questions to consider on this front include:
If they’re struggling in performance, you can coach them through it. But if they show little improvement across a few months, it may be time to let them go.
“One day of startup time feels like six months at a public company. You need to find folks who can work on that accelerated timeline — and it may take a while to hire them. That’s some candid advice I don’t hear people say aloud too often.”
Zak recommends taking this quote by Paul Graham as a rule of thumb:
“When startups are doing well, their investor updates are short and full of numbers. When they're not, their updates are long and mostly words.”
If you write your updates “very crisply and succinctly,” as Zak advises, it should take an investor less than five minutes to open up your email and figure out:
Concise, accurate updates are based on numbers
At any given moment, your investor may be juggling anywhere from 3–30 companies.
Tracking the health of all of these investments is made dramatically simpler by performance-focused, numbers-based monthly updates.
While KPIs obviously vary from startup to startup, Zak generally advises including:
| Startup Type | Priority KPIs | Notes |
|---|---|---|
| Enterprise tech (pre-seed / seed) | Revenue, NDR, user growth | Revenue and net dollar retention are relevant from early stages |
| Consumer | User growth, user retention (30/60/90-day) | Revenue may not appear for 2–3 years; NDR may never be relevant |
Your investors cannot help you if you don’t know where you need it
Let’s say you have a leaky top-of-funnel flow. Users are flooding in, yet you’re only retaining 15% of them in a 30-day period.
Or, let’s say your hosting bills have climbed gradually but significantly within a year.
Both of these situations could be quickly solved through your investor update: Ask your network to recommend 3–5 experts they trust in SaaS retention or reducing AWS costs. It’s an easy fix.
But it requires knowing your financials and where you’re bleeding in the first place.
Your investors want to help you thrive. They can’t do so without the numbers.
“There are very straightforward, tangible things that VCs can do to help your startup. But they can only do them if you know to ask. And you can only know to ask if you know your numbers as you write the update.”
With a traditional bookkeeper, you're flying blind between monthly reports. By the time the numbers land in your inbox, you may already be three or four weeks behind on a cash problem that needed a response two weeks ago. That delay is what makes month-end close for startups such a high-stakes process.
Puzzle updates your cash position, P&L, and balance sheet daily — so you know your burn, runway, and cash on hand any time you open the app, not just on the 15th of the following month. That's the difference between catching a cost spike early enough to course-correct and discovering it after the damage is done.
In practice, founders use that real-time visibility to write tighter, more credible investor updates (exactly as Zak describes above), to answer due diligence questions on the spot, and to make hiring or spending decisions based on current numbers rather than last month's snapshot. 85–90% of transactions are categorized automatically, so the books stay current without requiring weekly manual intervention. Most founders spend roughly 15–20 minutes a week reviewing AI-categorized transactions — the rest runs in the background.
